Indias Cold Chain Industry

Page 1 of 7

Country: Indias Cold Chain Industry

Renie Subin
August 2011

Summary
India is an agricultural-based economy. More than 52 percent of Indias land is cultivable, compared to the
global average of 11 percent. Each year, India produces 63.5 million tons of fruits and 125.89 million tons of
vegetables. India is also the largest producer of milk (105 million metric tons per year). India produces 6.5
million tons of meat and poultry, as well as 6.1 million tons of fish a year. The perishable products transaction
volume is estimated to be around 230 million metric tons. Although India has the potential to become one of
the worlds major food suppliers, the countrys inefficient cold chain network results in spoilage of almost 40
percent of its total agricultural production. The total value of the cold chain industry is estimated to be as high
as USD 3 billion and growing at 20-25 per cent a year. The total value is expected to reach USD 8 billion by
2015 through increased investments, modernization of existing facilities, and establishment of new ventures
via private and government partnerships.
The Indian agricultural sector is witnessing a major shift from traditional farming to horticulture, meat and
poultry and dairy products, all of which are perishables. The demand for fresh and processed fruits and
vegetables is increasing as urban populations rise and consumption habits change. Due to this increase in
demand, diversification and value addition are the key words in the Indian agriculture today. These changes
along with the emergence of an organized retail food sector spurred by changes to Foreign Direct Investment
laws, are creating opportunities in the domestic food industry, which includes the cold chain sector.
As a result of the Government of Indias new focus on food preservation, the cold storage sector is
undergoing a major metamorphosis. The Government has introduced various incentives and policy changes
in order to curtail production wastage and control inflation; increase public private participation and improve
the countrys rural infrastructure. We project that the Indian cold chain sector will expand at a faster rate in
the near future and recommend all U.S. companies selling to the cold chain industry to learn more about the
market to position themselves to take full advantage of emerging opportunities.

Market Demand and Market Data

The total value of Indias cold chain industry is currently estimated at USD 3 billion and reportedly growing at
an annual rate of 20-25 per cent. The total value for the industry is expected to reach at USD 8 billion by
2015 through increased investments, modernization of existing facilities, and establishment of new ventures
via private and government partnerships.
Indias cold chain industry is still evolving, not well organized and operating below capacity. Most equipment
in use is outdated and single commodity based. According to government estimates, India has 5,400 cold
storage facilities, with a combined capacity of 23.66 million metric tons that can store less than 11% of what is
produced. The majority of cold storage facilities are utilized for a single commodity, such as potatoes. Most of
these facilities are located in the states of Uttar Pradesh, Uttaranchal, Punjab, Maharashtra, and West
Bengal. The following table shows distribution of facilities by commodity:

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE

Indias Cold Chain Industry

Page 2 of 7

Commodity
Capacity (million tons)
Potato
9.282
Multi-purpose
0.763
Fruits & Vegetables
0.107
Meat
0.009
Fish
0.073
Meat & Fish
0.015
Milk & Dairy Products
0.068
Others
0.036
Statistical data are unofficial estimates from industry sources
In addition, India has about 250 reefer transport operators (this includes independent firms) that transport
perishable products. Of the estimated 25,000 vehicles in use, 80% transport dairy products (wet milk); only
5,000 refrigerated transport vehicles are available for all other commodities.
Indias greatest need is for an effective and economically viable cold chain solution that will totally integrate
the supply chains for all commodities from the production centers to the consumption centers, thereby
reducing physical waste and loss of value of perishable commodities. For this reason, the Government of
India has prioritized the development of the cold chain industry. The government has laid out elaborate plans
and incentives to support large scale investments essential for developing an effective and integrated cold
chain infrastructure.

Best Prospects
According to a report released by Technopak, a leading consulting firm, Indias food industry, which is
currently estimated to be at approximately USD 100 billion will grow to USD 300 billion by 2015. According to
a survey conducted by Corporate Catalyst India, another leading consulting firm, Value addition of food
products is expected to increase from 8 percent to 35 percent and that of fruits and vegetable processing from
the current 2 percent to 25 percent by the end of 2025. The survey further reports that the dairy sector,
which currently comprises the highest share of the processed food market, will experience marked growth.
One of the most critical constraints in the growth of the food processing industry in India is the lack of
integrated cold chain facilities. According to the governments estimates India has 5,400 cold storage
facilities of which 4,875 are in the private sector, 400 in the cooperative sector and 125 in the public sector.
Although the combined capacity of the cold storage facilities is 23.66 million metric tons, India can store less
than 11% of what is produced. Most of the infrastructure used in the cold chain sector is outdated technology
and is single commodity based. Many are designed for storing potatoes. Industry experts believe that
controlled atmosphere storage facilities and other cold storage facilities with the technology for storing and
handling different types of fruits and vegetables at variant temperatures would have a very good potential
market in India.
Another major constraint is the lack of refrigerated vehicles for movement of perishables produce (with the
exception of milk). According to industry estimates, approximately 104 million metric tons of perishable
produce is transported between cities each year. Of this figure, about 100 million metric tons moves via non
reefer mode and only four million metric tons is transported by reefer. Although there are currently more than
25,000 vehicles and 250 operators involved in refrigerated transport, 80% of this capacity is dedicated to
transporting milk. When compared with world standards for cargo movement through cold chain, India is still
far behind. The percentage of movement of fruits and vegetables through cold chain in U.S. is around 80 to
85 percent, Thailand is 30 to 40 percent and India is negligible. Currently, most of the refrigerated transport in
India is operated by small, non integrated firms that do not make use of stateoftheart technology or

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE

Indias Cold Chain Industry

Page 3 of 7

management practices. Therefore, India offers market potential for cold chain logistic solution providers,
including refrigerated transport services.
In addition, U.S. companies providing equipment and technology for pre-cooling, sorting, grading, packaging,
and information management systems (for traceability and tracking) will have good prospects in India.
The Government of India now recognizes that development of cold chain is an essential next step in
upgrading Indias food processing industry. In the 2011-2012 national budget, the Indian government
announced a series of measures to reduce the production and supply chain bottlenecks in the agricultural
sector in order to facilitate modernization, ease importation of foreign equipment, and attract foreign
investment in India. Some of these measures are listed below:
Accorded infrastructure status to post-harvest storage, including cold chain;
Raised the corpus of Rural Infrastructure Development Fund XVII to $ 4 billion in FY 12 from $3.5 billion
in FY 11 and the additional allocation would be dedicated to the creation of warehousing facilities;
The Viability Gap Funding Scheme is extended for public private partnership projects to set up modern
storage capacity;
Air-conditioning equipment and refrigeration panels for setting up cold chain facilities would be exempted
from excise duty beginning in the next fiscal year. Conveyor belts for equipment used in cold storage,
wholesale markets and warehouses would be also exempted from excise duty;
Creation of an additional 15 million tons capacity of storage capacity through public private partnerships
put on a fast track;
The National Horticulture Mission has sanctioned 24 cold storage projects with a capacity of 140,000
metric tons;
An additional 107 cold storage projects with a combined capacity of over 500,000 metric tons have been
approved by the National Horticulture Board;
Promised full exemption from service tax for the initial set up and expansion of cold storage, cold room
(including farm pre-coolers for preservation or storage of agriculture and related sectors produce) and
processing units. In addition, full exemption from customs duty for the manufacture of refrigerated vans or
trucks have also been promised;
A package of measures to improve the availability of storage and warehouse facilities for agricultural
produce and to incentivize food processing;
Announcement to set up 15 more mega food parks in the country;
States asked to reform the Agriculture Produce Marketing Act urgently to improve the supply chain;
A National Food Security Bill will be introduced in the Parliament later this year;
Credit flow in agriculture raised from USD 84 billion to USD 107 billion ensuring that resources do not
constrain growth in the sector

Key Suppliers
The following is a partial list of companies currently supplying cold chain technology/equipment/services in
India: Ingersoll Rand (USA); Rinac; Walco Engineering; Frick India; Carrier; Bluestar; Lamilux; Dupont;
Emerson Climate Technologies; Parker Hannifin; Snowman; R.K. Foodlands; Schaefer Systems International
Pvt. Ltd.; Metaflex Doors India Pvt. Ltd.; Alfa Laval (India) Limited; Tolsma Storage Technology, Snowman
Frozen Foods; Fresh and Healthy Enterprises, and Apollo-Everest Cool Solutions

Prospective Buyers
Following is a partial list of prospective businesses which are buyers of cold chain
technology/equipment/services in India: fruit and vegetable sellers; food processors; warehouse / cold storage
owners; refrigeration and cold chain equipment and technology suppliers. Others include Cold Logistics firms
such as shipping lines, transporters, container companies, warehousing agents, supply chain solution
providers, ports (Indian and international), large format retailers and wholesalers, academic and research
institutions, government organizations, packaging service providers, specialized equipment providers,

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE

Indias Cold Chain Industry

Page 4 of 7

refrigeration solution providers, seafood companies, pharmaceutical companies, and laboratories/ healthcare
centers

Market Entry
The Indian Cold Chain industry is poised to grow and is expected to offer significant opportunities for U.S.
cold chain companies in the near future. As an immediate step to assist U.S. companies in this sector, the
U.S. Department of Commerce (USDOC) has certified the India Cold Chain Expo (ICE) 2011 which will be
held December 1-2, in Mumbai, India. Organized by i2i Consulting (the Indian representative for the Global
Cold Chain Alliance) ICE 2011 is India's first and largest national level cold chain event that solely focuses on
cold chain products, technologies and services. This will be an ideal platform for U.S. companies to assess
the market and showcase their latest equipment and technology to key government and industry buyers. The
U.S. Commercial Service (USCS) office will organize a U.S. Pavilion offering U.S. exhibitors special
discounted prices, an Embassy market briefing, counseling by USCS experts, and arrange for one-on-one,
matchmaking meetings with prospective partners, distributors, and customers. The USCS strongly
recommends U.S. cold chain companies to exhibit at ICE Expo 2011 to be the first to assess emerging
opportunities
in
India.
To
register
for
ICE
Expo
2011
please
visit
http://export.gov/india/tradeevents/ice2011/index.asp
Apart from attending the show, U.S. cold chain companies can enter the Indian market by identifying local
partners, agents or distributors. The local partners will be aware of the existing market potential, competition,
and opportunities. They will know how to utilize the governments incentive programs on behalf of U.S.
companies with whom they work. U.S. companies interested in identifying business partners in India can use
the various fee-based services offered by the U.S. Commercial Service office in India. For more information,
visit the following weblink: http://export.gov/india/servicesforu.s.companies/index.asp
Another way to approach the Indian market is by directly participating in tenders for projects created by
the various state governments. In addition, companies can follow other firms like Ingersoll Rand, Carrier,
and Dupont that have established offices here.

Market Issues & Obstacles

In India, the agri-supply chain is poorly integrated, posing challenges at each step. There are huge gaps in
the system, both in terms of capacity and integration. Critical linkages like reefer transport and on farm
infrastructure are almost non-existent. Despite the obvious need for improvement and new government
initiatives to stimulate growth, private investment is in short supply for some of the following reasons:
Lack of knowhow and trained manpower Despite the increasing number of infrastructure projects,
there is a severe lack of manpower with appropriate skill sets to handle modern technology;
Lack of backward & forward linkages to supplement cold chain Cold chain in itself is not a
complete solution to address quality and marketability issues concerning perishable products. The
commodities which are transported and stored in the cold chain should have enough market value to absorb
the added cost;
Lack of trust concerning viability of cold chain projects Cold chain projects are still seen by
investors as high on capital, low on volume and requiring a long payback period for the investment. Cold
chain projects also involve aggressive marketing and investment on backward and forward linkages. This,
coupled with a dearth of successful demonstration projects in the sector is keeping potential investors away;

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE

Indias Cold Chain Industry

Page 5 of 7
High capital investment As noted above, a high level of capital is required at the initial stage of
building a high-end cold chain facility, thus reducing the attractiveness of this type of investment. The lack of
institutional investors has not helped to improve the sector. The result, to date, has been a disorganized

approach to establishment of a truly efficient cold chain network of facilities and transportation companies;
High operational costs due to high cost of power Unlike the agricultural sector which is offered
highly subsidized power tariffs by the Government of India, the cold chain industry does not enjoy this status
and is instead subjected to industrial power tariffs. This significantly increases the operational cost for cold
chain operators and act as a major deterrent for growth;
Problems of optimization in reefer transport Lack of two-way cargo movement/ back haulage,
interstate barriers, intercity/state taxes, and bad roads are some of the issues which increase operating costs,
delay timely deliveries and reduce the efficient utilization of fleets.

Trade Events
India Cold Chain Expo (ICE) 2011, December 1-2, 2011, Mumbai
Organized by i2i Consulting (the Global Cold Chain Alliances India representative), ICE Expo 2011 is a
trade show and conference that exclusively focuses on the cold chain industry. ICE Expo 2011 has been
certified by the U.S. Department of Commerce and will feature a U.S. Pavilion staffed by U.S. Commercial
Service specialists. For more information about the show please contact:
Ms. Purnima Rawat
Marketing Manager
Global Cold Chain Alliance - India
IARW | WFLO | IRTA | IACSC | IIAR
Head Office: 10, Sunder Nagar, New Delhi 110003
Branch Office: D - 18, Murali Marg, Nizamuddin East, New Delhi 110013
INDIA
Mobile +91 9899862848
Phone +91-11-2435-5047
Fax +91-11-4150-7155
Email: prawat@gcca.org | Website: www.gcca.org
U.S. companies interested in using the discounted fees and booth sizes offered for exhibiting at ICE
Expo 2011 may contact any of the following U.S. Commercial Service India specialists:
Ms. Renie Subin, Commercial Assistant, USCS New Delhi at renie.subin@trade.gov; Phone: +91-11-23472155; Fax: +91-11-2331-5172 or through its website: www.export.gov/india
Mr. Aliasgar Motiwala, Commercial Specialist, USCS Mumbai at aliasgar.motiwala@trade.gov; Phone: +9122-2265-2511; Fax: +91-22-2262-3850 or through its website: www.export.gov/india

Resources & Contacts

Mr. Atul Khanna
Director
Global Cold Chain Alliance - India
Head Office: 10, Sunder Nagar, New Delhi - 110003

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE

Indias Cold Chain Industry

Page 6 of 7

Branch Office: D - 18, Murali Marg, Nizamuddin East, New Delhi 110013
Tel: +91-11-4659-0340
Mobile: +91-9810059597
Email. akhanna@gcca.org
Website: www.gcca.org
Mr. Amritlal Meena
Joint Secretary

Ministry of Food Processing and Industries

Panchsheel Bhavan, August Kranti Marg
New Delhi 110 049
Tel: 91-11-26492476
Fax: 91-11-26492863
Mr. Bijay Kumar
Managing Director
National Horticulture Board
Ministry of Agriculture, Government of India
85, Institutional Area, Sector - 18
Gurgaon - 122015 (Haryana)
Tel: +91-124-2342992; 2347441; 2342989-90
Fax: +91-11-2342991
Email: mdnhb@yahoo.com
Website: http://www.nhb.gov.in
Mr. Sanjeev Chopra
Mission Director and Joint Secretary
National Horticulture Mission
Tel: +91-11-23382444
Fax: +91-23073779
Email: chopra.sanjeev@nic.in
Website: http://nhm.nic.in/
Ms. Amita Sarkar
Senior Director
Confederation of Indian Industry
India Habitat Centre
Core 4A, 4th Floor, Lodi Road
New Delhi-110003, India
Tel: +91-11-2468223035; 41504514-19
Fax: +91-11-24682228
Email: amita.sarkar@cii.in
Website: http://www.ciionline.org/
Dr. S. Baskar Reddy
Joint Director
Federation of Indian Chamber of Commerce and Industries (FICCI)
Federation House, Tansen Marg
New Delhi 110 001
Tel: +91-11- 23753124 (D)
Email: baskar@ficci.com

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE

Indias Cold Chain Industry

Page 7 of 7

Website: http://www.ficci.com

For More Information

The U.S. Commercial Service in CS New Delhi, India can be contacted via e-mail at: renie.subin@trade.gov;
Phone: +91-11-23472000; Fax: +91-11-23315172; or visit our website: http://export.gov/india/

The U.S. Commercial Service Your Global Business Partner

With its network of offices across the United States and in more than 80 countries, the U.S. Commercial Service of
the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S.
companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the
U.S. nearest you by visiting http://www.export.gov/eac.
Comments and Suggestions: We welcome your comments and suggestions regarding this market research.
You can e-mail us your comments/suggestions to: Customer.Care@mail.doc.gov. Please include the name of
the applicable market research in your e-mail. We greatly appreciate your feedback.
Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every
effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the
accuracy or completeness of information in this or any other United States government document. Readers are advised to
independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal
advice. The Commercial Service reference to or inclusion of material by a non-U.S. Government entity in this document is for
informational purposes only and does not constitute an endorsement by the Commercial Service of the entity, its materials, or
its products or services

International copyright, U.S. Department of Commerce, 2007. All rights reserved outside of the United States.

The U.S. Commercial Service Your Global Business Partner.

export.gov
800-USA-TRADE